MIS 5000 Case (From Stairs p.

34)

Coors Ceramics Revamps Information Systems

Coors Ceramics was spun off from the Adolph Coors Company in December
1992. Today, the company is one of the leading suppliers of ceramic materials
and components to the semiconductor and laser industries anndd has developed
a worldwide reputation for quality and precision.

Coors' old information system took as long as two days to process new orders.
Because of delays and inaccuracies in processing; there was no way a
salesperson could track the exact status of a particular customer's order. With
1,500 orders coming in monthly, that was a huge problem. To compensate for the
processing delays, Coors would produce more components than it had received
orders for so that it couuld build up inventory to meet customers' desired delivery
dates. Although it did help meet customer demnd, this approach raised inventory
levels, production costs, and overhead costs. Customer delivery was also a
problem. The old system could track shipments only on a weekly basis. If a
customer wanted an order on Monday, and Coors shipped it by the following
Saturday, the system logged that order as being on time. When customers called
to complain, the salesperson would get no valid data from the system other than
an incorrect "shipped on time report".

It was clear that improvements were needed; however, before investing in new
information systems, Coors defined three key business goals that the new system
must achieve: First, Coors had to increase customer satisfaction. Salespeopplle
werre uder tremendous pressure to get information for customers - which in turn
prevented them fro developing new orders and selling products. Second, Coors
wanted to reduce lead times. If work-in-progress, inventory and delivery
schedules could be reduced, then Coors could fulfill more customer orders. Third,
Coors needed to reduce operating costs.

Coors' approach to meeting these goals required streamlining many

fundamental business work processes. The project team focused first on how to
meet the needs oof the customers before they thought about howw too update
their outdated information systems. Thiss rethinking often required challenging
fundamental assumptions about how the business should operate. Once the work
processes were reedesigned, the project team implemented an integrated set of
information systems. These new systems automated the work processes
associated with acquiring raw materials, transforming raw materials into top
quality products, and delivering them to customer within the shortest possible
time.

The project proved to be highly successful. Since the systems were installed,
Coors' product cycle has been cut from an average of 12 weeks to 8 weeks; and
on-time shipments have improved to over 95%. Coors salespeople can no be
confident that "shipped on time" means the order was delivered on time - not just
that it shipped ithin a seven-day period.
 The new information systems have als improved business decision making.
Each morning, the general manager of sales an marketing meets with keey
people from manufacturing, engineering, and sales. They review the previous
day's sales and requests for new products. They discuss how things are going and
can check on the current status because everything that happene as of that
morning is already in Coors' information systems, ready for decision making.

Discussion Questions

1. How has implementation of an integrated set of information systems

enabled Coors to meet customer needs more effectively?

2. Did this system meet all three key business goals for new systems t Coors?
Why or why not?

Critical Thinking Questions

3. Identify three key decisions that must be made at the business review meeting
each morning. Identify six questions that are likely to be asked by the general
manager at the morninng review meeting.

4. What additional features or benefitss might you want this basic system to
deliver?

Sources: Adapted from the "Investor Relations" and "Products and Services" portions of the Coors
Tek Web site at http://www.coorstek.com accessed Feb. 9, 1999; and the "about QAD's
Applications" portion of the QAD Web site at http://www.qad.com/product accessed Feb. 9, 2000.

Evanston Public Library Board of Trustees. “Evanston Public Library Strategic Plan, 2000–2010: A
Decade of Outreach.” Evanston Public Library. http://www.epl.org/library/strategic-plan-00.html
(accessed June 1, 2005).

Christine Grahl. “Investing in Ceramics - CoorsTek: A Strong Player in High-Tech Markets,” Ceramic
Industry. Posted: June 1, 2001.
http://www.ceramicindustry.com/Articles/Feature_Article/86ec48379d9c7010VgnVCM100000f932a
8c0____ (accessed June 7, 2010).